Suppose that households become thriftier; that is, they now wish to save a larger proportion of their disposable income and spend a smaller proportion.
a. Draw an aggregate expenditure diagram and show how an increase in saving can be measured in that diagram.
b. Use your aggregate expenditure diagram to show how an economy that is initially in short-run equilibrium will respond to an increase in thriftiness.


i know yall can't draw the diagram for me but can anyone explain to me what will happen

4/12/2006 12:39:56 AM

4/12/2006 2:17:07 AM